The Effect of Aging Workforces on the Digital Transformation: Evidence from South Korea

Gaheyon Cheon and Sora Lee
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Gaheyon Cheon: Korea Institute for Industrial Economics and Trade
Sora Lee: Korea Institute for Industrial Economics and Trade

No 25, Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: Historically, older workers were often regarded as valuable assets in traditional industrial settings due to their skills and experience. But the industrial environment is now characterized by the rapid adoption of advanced digital technologies. Older workers tend to adopt new technologies at a slower rate compared to younger generations; for firms striving to maximize productivity and competitiveness, this drawback makes the employment of older workers less attractive than in the past.

Given the above, it is worth examining the characteristics of an aging workforce in relation to the digital transformation to produce insights that can inform industrial and workforce policy. For this study, we focus on assessing the impact of workforce aging on firms’ adoption of digital technologies. Specifically, we aim to quantitatively evaluate how the proportion of older employees within different industries affects the adoption and utilization of digital transformation technologies. Through this analysis, we seek to better understand the interaction between workforce composition and digital innovation, and ultimately offer policy insights to support a more inclusive and effective digital transition.

Keywords: digital transformation; DX; population aging; demographic change; workforce aging; workforce structure; age distribution; aging; population structure; population decline; working-age population; Korea (search for similar items in EconPapers)
JEL-codes: E24 J11 J24 M51 M53 M54 (search for similar items in EconPapers)
Pages: 10
Date: 2025-08-31
New Economics Papers: this item is included in nep-age
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Published in KIET Industrial Economic Review Vol. 30, No. 4, pp. 36-46

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